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Hollywood Backs Toshiba on DVD Format

November 29, 2004

TOKYO -- Japanese electronics maker Toshiba Corp. is getting support from four Hollywood studios for its next-generation DVD format which is expected to be used in players, recorders and other products that go on the market late in 2005.

The Toshiba high-definition DVD format is competing against a rival technology called Blu-ray disc, and it is unclear which format will eventually dominate the market.

Both formats promise increased storage capacity and movie resolution superior enough to get the most out of high-definition TV sets.

The lineup of movies is considered crucial to selling electronic products. But analysts say studios are likely to bring out films for whatever format that becomes the standard and are ultimately unlikely to be loyal either format.

In separate statements released Monday, the U.S. studios Paramount Pictures, Universal Studios, Warner Bros. and New Line Cinema said they will offer titles in the Toshiba HD DVD format but did not say which titles or give other details.

Paramount Home Entertainment, a unit of Viacom Inc., and General Electric Co.’s Universal Pictures said the offerings will be released next year. Warner Bros. and New Line, both part of Time Warner Inc., did not give a date in a joint statement.

Rival technology Blu-ray disc, backed by Sony Corp., which owns the Hollywood movie studio Sony Pictures, and is leading a consortium buying the studio Metro-Goldwyn-Mayer Inc.

Matsushita Electric Industrial Co., which makes Panasonic brand products, and other companies back Blu-ray, and News Corp.’s Fox Entertainment Group Inc., which includes Twentieth Century Fox, is a board member of the association that backs Blu-ray.

Blu-ray can store more digital programming than HD DVD, but proponents of HD DVD say it will be cheaper for manufacturers because it is uses technology that more closely resembles that used in current DVDs.

Universal Studios Home Entertainment President Craig Kornblau said in a statement he favors HD DVD over other standards.

“We have evaluated all of the emerging home entertainment technologies and have selected the one which we feel is the most beneficial to our consumers,” he said.

Toshiba plans to start selling its first HD DVD products, a player and a recorder, and a laptop with a built-in HD DVD drive in late 2005.

Yoshihide Fujii, corporate senior vice president overseeing the digital media business, said Toshiba is targeting annual HD DVD-related sales of 5 billion yen ($49 million) in 2005, and expects that to climb to 300 billion yen ($3 billion) by 2010.

Fujii said the spread of flat TVs is boosting the demand for high-quality digital movies and other content. The endorsement from Hollywood is a plus for HD DVD, but he stopped short of saying the deals were exclusive and refused to provide details.

“Even if we come out with the hardware, without content, it’s just a box,” he told reporters at a Tokyo hotel.

HD DVD has been endorsed by a forum made up of more than 200 companies.

“We believe that HD DVD has clear advantages in cost of manufacturing and ease of replication, offering consumers the highest quality viewing experience at the most affordable price,” said Thomas Lesinski, president, Paramount Pictures, Worldwide Home Entertainment.

“We’re confident that retailers and consumers alike will support this compelling technology,” he said.

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